Study On The Capital Adequacy Ratio Regulation Over Our Commercial Banks Under The Framework Of New Basel Capital Accord

Capital is extremely important to a bank's steady operation. Whether it is adequate or not is almost the premise for a bank to perform normally, thus the regulation over commercial banks'capital adequacy ratios becomes the core mission of each country's regulatory authorities in their regulation practice. To intensify the regulation over commercial banks'capital ratios not only helps to improve the commercial banks'risk management and urge them to take reasonable capital structures, but also be good to protect the interests of depositors and creditors, at the same time maintain the stability of the whole banking system as well as the financial system.Along with the fast development of financial globalization, international merger and cooperation have received increasingly high attention from each country's bank regulation authorities. Some international organizations like Basel Committee have been more and more influential over the world. The minimum capital requirement first came into effect in the 1988 Basel Capital Accord, after several times of revision it formed the prudential capital adequacy framework in the New Basel Capital Accord based on three pillars. Now the capital requirement has been admitted as the international standard to measure the stability of a single bank, even the whole banking system, also as the fundamental measurement to maintain fair global banking competitiveness.Now look at our domestic banking industry, there still exist many problems. The market legal system, credit environment and the company organization structures which are still under perfection, and the existence of invisible guarantee from our government directly cause domestic banks the lack of capital restriction and blind pursuit of assets expansion. The high non-performance loans ratio, simple capital structure and accumulated operation risk limited the commercial banks'sustainable and healthy development, also effect the stability of the whole banking industry. As a developing country, our financial market has much closer connection with the global one day after day, if we want to gain competitiveness and develop beneficial conditions for ourselves, our regulation authorities should catch up the pace of the international society, learn from the developed countries and use their experience to serve for our practice.Facing the problems in our banking industry and the situation in our capital regulation, this thesis intends to take a systematic discussion of above problems under the framework of the New Basel Capital Accord, and give reasonable advises to improve our banks'capital adequacy regulation.